Strategic Foresight in the Water SectorHeidi Ryan and Ann GoodingMelbourne Water

Our Burning Platform

Foresight is crucial

The water industry is in a period of rapid change. Until now, we have incrementally adapted to change and we

have been able to plan ahead 50 or 100 years with confidence. However for the period that is now unfolding we

require new, bolder approaches.

Melbourne Water’s foresight program enables us to take advantage of opportunities and address the challenges.

It provides us with an understanding of global trends, which are crucial in an interconnected world where

boundaries between industries are blurred.

Melbourne Water’s Foresight Program

The planning cycle starts with an Operating Environment Scan

• Melbourne Water undertakes an Operating Environment Scan once a year to identify global and local trends

• The scan is a critical input to Melbourne Water’s strategic architecture and is provided to the Board and Leadership

Team for their annual strategic workshop

• Melbourne Water uses the scan to make informed decisions about organizational planning and to set organizational

priorities for the year

Trends identified in 2018

Melbourne Water’s Foresight Program

1. Accelerated Growth (population is increasing faster than expected, population location)

2. Booming Infrastructure (increasing demand, shortening supply, social procurement)

3. Changing Customer Expectations (digital experiences, understanding customer needs)

4. Gathering Intelligence (data is growing, security and connectivity threats, AI)

5. Managing Diversity in the Workforce (pace of change, changing workforce, emerging skills gaps)

6. Matrix Accountability (shared risks/challenges, working together, transparency and trust)

7. Positive Outlook on the Economy (positive macro outlook, impact on cost of living)

8. Responding to Climate Change (GHG, temperatures and energy use are increasing, slow transition from coal)

9. Smart Health (emerging contaminants, growth in mental illness, more data from devices, decentralised care)

Analysis of trends in 2018

Melbourne Water’s Foresight Program

• In 2017 the top three trends were ‘Urbanisation’, ‘Climate Change’ and ‘Digital Future’

Lessons learned

The Operating Environment Scan has been successful in:

• stimulating conversation at the annual Board Strategic Workshop

• influencing Melbourne Water’s Strategic Direction

• promoting Melbourne Water’s foresight program to the sector

• communicating reasons for change to Melbourne Water employees

• developing foresight capability in employees

Opportunities for improvement include:

• operationalise the Operating Environment Scan

• build alignment across the ten year plan for Melbourne Water and ensure that it is

embedded in business unit priorities

• ensure work is driven by organizational goals

• shape the workforce of the future

New Approach in 2019

Service planning as an annual process that:

• promotes conversations that connect the short, medium and long terms horizons (i.e.

Operating Environment Scan to annual planning)

• works with the business to ask ‘the big questions’, set agreed priorities for each service, and

connects these to meaningful actions

• provides a single view of service aligning our investment, service and performance planning

The process is supported by:

• improved Operating Environment Scan (updated)

• service on a page (new)

• business planning (updated)

• service performance dashboard (new)

New Approach in 2019

Business Planning

Service on a Page

• What is each Groups contribution to deliver on Service Objectives over the next 12 months

• Three horizons worked through for each service, actions listed for each business unit as contribution to achieving each horizon

• Executive Roundtables: Our big strategic questions

• External environment pressures

• Long term trends that may impact our services

• Strategic workshop, and Executive + Board round tables

Month J A S O N D J F M A M J

Corporate

PlanBoard Review of

Pricing Paper

Understand & Agree (Current State Assessment)

Explore & Set (Future State Design)

Implement & monitorEvaluate & Data Validate &

communicate

Board

strategy

session

Annual

Report

Final 20yr

Capex PlanDraft Final

20yr Capex

Plan to PLT

Business

Plans to Board

Corporate Planning

• Organisational view on delivery for 5 years

Service Performance Dashboard

• Tracking on performance against targets and initiatives:

• Allowing for us to see if delivered on was set out in Business Plans and if the business is we on track to achieve the Service Objectives

New addition

Change to

current approach Change

to current

approach

New addition

Operating Environment

Scan

9

Horizon One: Understand the market

Horizon Two: Go to market strategy

Horizon three:Delivery

DEFINING SERIVCE PORTFOLIO

• Understand Customer expectations and insights

• Seek enabling policy environment

• Develop service portfolios

• Customer satisfaction

DEVELOPING SERVICE STRATEGIES & PLANS

• Develop Waste to Resources Strategy

• Develop marketing plan • Measure performance

SERVICE DELIVERYAND INVESTMENT PLANNING

• Develop AM Plans & Works Programs

• Develop Investment Plans (Capex & Opex)

• Develop Operational Plans

• Plan and initiate projects• Review Condition and Performance

information

SERVICE LIFECYCLEDELVIERY

• Deliver Operational Plans• Deliver Maintenance & Works Programs• Decommission & Dispose Assets/Non-

Asset Solutions• Delivery of Investment Programs

Service Objective: Waste to resources

What could a service on a page look like?

Key input

into

Business

Planning

Customer and

Strategy

Integrated

Planning

Integrated

Planning Asset

Management

Services

Wholesale

services,

Waterways &

Land, Major

Program

Delivery

Perf

orm

ance M

onitoring &

Revie

w &

Custo

mer

Insig

hts

Business Groups• Keep it simple• Critical to success is

alignment across business units

• … and the conversations that underpin this

Thank you

Methodology

Melbourne Water’s Foresight Program

Sep Oct Nov Dec

• Desktop research

• Interviews with stakeholder and customer representatives

• Interviews with Melbourne Water executive team

• Employee survey to determine likelihood and consequence of the trends

• Analysis of trends including interdependencies and scenario planning

• Presentation to Board and Leadership Team

• Communications to the business – roadshow and briefings

Develop and deliver the Operating Environment Scan Embed in the business

New Approach in 2019

Where are we now?